SAATCHI & Saatchi is in the black for the first time since 1988, but
the outlook remains dull and the payment of a dividend even next year is
in doubt.
Last year the group made profits of #19.2m against losses totalling
#595m, made up of massive restructuring costs. Underlying revenue growth
was flat though currency movements increased the reported figure.
Turnover came to #813m, up 9%.
Saatchi's balance sheet is in better shape, with debt down from #194m
to #112m. Deferred consideration for past acquisitions, which has been
such a drain in recent years, is down to #10m, spread between now and
1999.
Further redundancies and other cost-cutting will benefit 1994 but the
real key to raising profits is more revenue and here chief executive
Charles Scott is not confident, actually expecting a decline following
the loss of two major accounts. A new boss has been appointed to the
American business with a brief to reinvigorate it. The US market is
particularly important given its size and its location as the home of
most multinationals. Heads will roll if more accounts are not won.
''There are no doubts in my mind that my career in this company is
limited if revenues don't rise,'' Mr Scott stated.
Four-fifths of revenue comes from the advertising agencies, Saatchi &
Saatchi Advertising Worldwide and Backer Spielvogel Bates.
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